MBA Grads Average Six-Figure Debt
Almost half of students at top b-schools borrow at least $100,000 to finance their MBAs, a new study finds.
Bloomberg Businessweek surveyed more than 10,000 MBA grads from the class of 2018 at 126 b-schools around the world. Roughly 40% of survey respondents who received MBAs from Duke University’s Fuqua School of Business, Tuck School of Business at Dartmouth College, University of Michigan’s Ross School of Business, SC Johnson Graduate School of Management at Cornell University, and University of Chicago Booth School of Business reported graduating with six-figure debt.
The highest percentage was 47% at Fuqua, with Dartmouth Tuck (46%) trailing close behind. Other top MBA programs with high percentages of six-figure debt, according to Bloomberg Businessweek, include the Wharton School (37%), MIT Sloan (36%), NYU Stern (34%), and Northwestern Kellogg (33%).
“The survey results shed new light on the amount of debt that aspiring executives and entrepreneurs take on to jump-start their careers with a credential prized by the nation’s leading financial institutions, consultancies, and corporations,” Shahien Nasiripour, of Bloomberg Businessweek, writes. “Long considered one of the most expensive graduate degrees, MBAs have tended to be pursued by prospective students because the payoff in higher pay and wider career opportunities convinced them that the degree was worth it.”
MBA GRADS SAY DEGREE IS WORTH IT
Despite the six-figure debt that MBA grads accrue, many say the advanced degrees still have value.
“I don’t view it as a burden,” Mike Sanchez, a Citigroup Inc. investment banker who graduated last year from Booth with about $110,000 in student debt, tells Bloomberg Businessweek. “Long term, the ROI [return on investment] is still pretty good.”
Steve Alexis, a supply chain manager at Google who graduated from Howard University School of Business with about $40,000 in student loans, tells Bloomberg Businessweek he has “no regrets whatsoever” about his MBA despite the amount of debt he incurred. Alexis says his MBA helped him “to elevate from non-management to where I’m in charge of some operations, it was worth the investment,” he tells Bloomberg Businessweek.
SCHOOLS WITH BEST ROI
While MBAs can rack up insane amounts of debt, there are still b-schools out there that offer better ROIs than others.
Data published by SoFi, a student loan refinancing company, found that the University of Wisconsin School of Business offered the best ROI for MBAs, with an average salary of $122,532 and average debt of $52,568 for an ROI score of 2.3x.
The University of Pennsylvania’s Wharton offered the highest average starting salary at $224,034. But MBA grads from Wharton also averaged a debt load of $128,549, according to SoFi data.
Pursuing an MBA is no easy, nor cheap feat. Yet, many say the degree has benefits that are difficult to assign a monetary value to.
“I got exactly what I wanted – access to brilliant classmates and faculty that I would never have encountered on my own,” Mike Catania, the founder of the coupon website PromotionCode.org and a student in the executive MBA program at the University of California—Los Angeles Anderson School of Management, tells US News. “It’s difficult to ascribe a value to that, but I look at it as only temporarily intangible – the relationships forged over the next few years will positively affect my opportunities as an entrepreneur moving forward.”